Tesla Wins Dismissal of Massachusetts Car Dealers’ Suit

Tesla Motors Inc. (TSLA), the maker of Model
S electric cars, won the dismissal of a lawsuit brought by
Massachusetts auto dealers seeking to stop it from operating its
own showrooms in the state.

A Norfolk Superior Court judge ruled against the
Massachusetts State Automobile Dealers Association, finding that
a state law didn’t necessarily give dealers standing to pursue
legal claims over manufacturer-owned stores.

“This court is unconvinced that the 2002 amendment to
Chapter 93B expanded the purpose of the statute to protect the
motor vehicle franchise system,” Judge Kenneth J. Fishman said
in a Dec. 31 decision, referring to provisions Massachusetts law
regarding trades.

Tesla, based in Palo Alto, California, opened a showroom in
Massachusetts’ Natick Mall, according to the lawsuit filed by
the car dealers association in October. The dealers alleged the
company’s “novel distribution chain for their vehicles”
skirted legal requirements.

“We are delighted by the outright dismissal of this case
and the validation that we are operating our business in
compliance with the laws and expectations of the Commonwealth of
Massachusetts,” Elon Musk, Tesla’s co-founder and chief
executive officer, said in a statement. “We are confident that
other states will also come to this same conclusion.”

Robert O’Koniewski, executive vice president of the
Massachusetts dealers association, said the organization is
considering an appeal.